As part of its plans to unlock its large land bank, denim major Arvind Ltd. has taken first major step by announcing its plans to form a 50:50 joint venture with city-based real estate developer B Safal Group promoted by Rajesh Brahmbhatt.
With a special purpose vehicle (SPV) to be formed later, the joint venture will develop about one million sq feet of residential complex in one third of the area of Ashoka Cotsyn, a division of Arvind Limited, situated at Khokhra in Ahmedabad.
When fully developed, the project will be worth Rs 225 crore, an official communique stated. In addition, B Safal group will also buy 1/3rd of the land area. B. Safal will pay Rs 70 crore consideration for buying this land and for 50 per cent stake in the joint venture.
Talking about the joint venture, Jayesh Shah, director and CFO of Arvind said, "This is a good proposal for Arvind as it is not only realising cash up-front but is also keeping the upside of appreciation open as Arvind is retaining about one third of land with it for future development. We expect to realise about Rs 200 crore from sale and development of said land at Ashoka Cotsyn over next two years."
The joint venture is expected to result in development of anywhere between 1,200 and 1,500 2BHK and 3BHK residential units.
"There is a very large unfulfilled demand of quality housing in East Ahmedabad. We will aim to fulfill this demand by providing superior quality facilities and we are very excited about this venture," said Rajesh Brahmbhatt, chairman of B Safal Group.
Arvind, which holds about 600 acres of land in and around Ahmedabad and has applied for two townships as per the new township policy of the Gujarat government. Arvind has floated a 100 per cent subsidiary company Arvind Infrastructure Limited which is engaged in the real estate development.
